Patent Public Advisory Committee Opening Remarks

Thank you, Louis [Foreman, Patent Public Advisory Committee Chairman], and good morning everyone! It's a pleasure to be here for this year's third meeting of the Patent Public Advisory Committee.

I'd like to extend a warm summer welcome to all of the committee members, many of you former colleagues, and thank you for your service. And let me thank my friend Louis for his stellar leadership as Chairman. I have a natural fondness for PPAC, having served on the Committee before joining the USPTO. The partnership between PPAC and the USPTO is, in my opinion, like no other partnership in government.

From the efforts that led to the America Invents Act to the process by which this agency exercised its fee-setting authority for the first time, we've stood together to advance the interests of this agency and the innovation community.

That's why, on any and all subjects I'll be discussing this morning, and any and all that my colleagues will discuss following me, what is most valuable to us is direct and constructive feedback and guidance. Tell us what we are doing right, and what we are doing better. There will be a lot of opportunities for you to provide that feedback today. As you can see on the agenda, we have a full program. Many members of the USPTO's senior leadership will be updating you on the important programs and initiatives underway here.

This has been a very exciting time at the USPTO. As you'll see, there's a lot of good work being done at the agency and much good news to share as well. And I think it's very important to keep that good work and news in mind in light of other things being written about the agency.

As I am sure that you've heard, there have been some recent reports questioning certain aspects of agency operations. All of us here, together-from senior USPTO leadership to PPAC leadership to those watching from afar, who are all in this together-we all take great pride in how well this agency runs and what it has and will accomplish. And, I also know you all take very seriously any suggestion that we are not meeting the high standard this agency has set for itself and that you rightly expect of us. I certainly do.

With that in mind, I'd like to take a moment to address the recent questions that have been raised in the press about patent examiners and their supervision.

Here are the facts:

Two years ago the USPTO received a request from the Commerce Department's Office of Inspector General to look into those operations, and we provided the OIG a final report in July of last year, complete with the entirety of all internal interview transcripts and supporting exhibits gathered to support the conclusions in that report, as well as used in the drafts that preceded the final report.

While we found isolated problems in our telework and timekeeping systems, the evidence did notsupport a finding of widespread or systemic abuses. In fact, there are extensive accountability systems applied to patent examiners. They are closely bound to production requirements, and supervisors closely review their work.

And here is another fact: our telework program remains a proven success story.

The Office of Inspector General, in a 2012 audit and report, in fact praised our telework program across-the-board, saying it "is succeeding as a business strategy." That audit identified good management controls over a program that saved money while increasing productivity and employee retention.

That OIG audit also said that teleworking and hoteling USPTO employees review more patent applications than do examiners working at headquarters. Hotelers spend more time examining applications in part because they use less sick and administrative leave. In fact, the average hoteler spends 66.3 more hours a year examining patents than does the average in-house examiner. This translates to reviewing about 3.5 more patent applications a year.

The OIG further quantified how the program is helping us reduce our backlog of unexamined patent applications. It found teleworking and hoteling examiners remove 2.6 more new applications from the backlog each year than an examiner working at headquarters.

But as you know well, the USPTO is always looking to improve the efficiency and effectiveness of our operations. That is why, in our report to the OIG in July 2013, we identified several areas of possible improvement. We have been hard at work putting those in place, with most being completed and the remainder in progress. Following the July 2013 report,

We instituted new guidance to supervisors to ensure proper accounting of hours worked.

We launched an education campaign for supervisors and employees on telework policies.

We established a Director-led working group to examine how we count examinations and the impact of examinations done near the end of an evaluation period.

And we have been reopening performance plans for examiners each year since 2010-predating our report-to ensure performance is rated accurately.

We have our Patents leadership here today, and they can talk in greater detail about our hardworking patent examiners and how they are effectively supervised. And as I said before, we very much value your feedback, as our partners, on what we're doing right and also what we can do better. So we welcome your thoughts and comments as we continually improve our patent examination process.

On a related note, you know how focused I am-how focused this entire agency is-on patent quality. I spoke at length on the topic recently at Stanford Law School, where I announced our new patent quality initiative, what we call "Building a world-class patent system." In a few minutes Commissioner for Patents Peggy Focarino will provide more details to you. The system is supported by three pillars:

(1) Providing the best work products and services at every stage of the patent process,

(2) Improving the customer experience with an emphasis on excellent customer service, and

(3) Engaging the public in partnership to educate and seek input.

I should note that I also had the shared some of this last month when testifying before the House Judiciary Subcommittee on Courts, Intellectual Property and the Internet.

I also discussed with them how pleased we are that the Fiscal Year 2015 appropriation bill gives us the authority to spend anticipated fee collections. This stable funding source gives us the flexibility to continue reducing the new patent application and RCE backlogs, shorten pendency, and improve patent quality.

In this fiscal year, we expect to receive nearly 600,000 patent applications, an increase of more than five percent over Fiscal Year 2013.

Our backlog of unexamined patent applications now stands at fewer than 620,000 - a decrease of more than 17 percent since 2009, despite an average five percent increase in filings year over year.

We are also continuing efforts to enhance the patent administrative appeal and post-grant processes, to update our IT infrastructure, and to expand the work of our Examiners internationally through initiatives such as CPC and Global Dossier.

And now let me relate another good story. I mentioned I was at Stanford in late June to discuss our patent initiatives. A few days after that speech, on June 30th, Peggy and I were joined by Deputy Secretary of Commerce Bruce Andrews and PTAB Chief Judge James Smith in officially opening our new satellite office in Denver. Also present were a number of elected officials, inventors, IP practitioners and other luminaries.

I can tell you from my conversations in Denver that our office there has created a lot of excitement.

And for good reason. Mayor Michael Hancock expects the office to generate more than $400 million dollars in economic activity over the next five years. I actually heard the mayor say that on the train that took me to baggage claims at the Denver airport. Now you should know I wasn't in that airport train with the mayor. Instead, I heard his voice in a recorded welcome message to the USPTO that played for every single traveler in that very active airport. It was a welcome surprise, let me tell you!

In other Denver news, we recently hired an experienced and highly accomplished patent attorney named Russ Slifer to serve as the new director of the Denver office. I have every confidence that Russ will do an outstanding job.

We've also moved quickly to hire local patent examiners and administrative patent judges, with twenty-one examiners and eight judges already hard at work there and more on the way.

More examiners means more bright minds to examine patent applications. They'll join a great team of professionals at the USPTO dedicated to issuing the highest quality patents possible.

So back to our meeting today. Following Peggy's presentation, Deputy Commissioner for Patent Examination Policy Drew Hirshfeld will share with you some of the key points of recent court decisions and the subsequent guidance and training we provided to our Patent Examiners in light of those decisions.

I should add that Drew recently chaired (and I attended) a well-attended and well-received public Software Partnership meeting here at the agency to cover those subjects, and it proved to be yet another valuable step in our larger efforts to build a better patent system with our stakeholders.

After Drew speaks, Deputy Commissioner for Patent Operations Andy Faile will provide an update on our efforts to further reduce the RCE backlog.

Later in the morning you'll get an update from Mike Neas, of our Office of International Patent Legal Administration, on our international efforts.

The Patent Examiner Technical Training Program (PETTP) Lead from the Office of Patent Training, Alexa Neckel, will then provide an update on the technical training we're providing to our Patent Examiners, and Chief Judge James Smith will close out the morning agenda by providing an update on the important work of the Patent Trial and Appeal Board.

Continuing our program this afternoon, Chief Financial Officer Tony Scardino will update you on finance and budget and Dana Colarulli - our Director of Governmental Affairs - will provide a legislative update as well.

And finally, before you wrap things up this afternoon, Chief Information Officer John Owens and Patents End-to-End Portfolio Manager Kat Wyrozebski will update you on the latest with the PE2E initiative.

So at this point I'd like to hand things back to Louis. You've got a lot on the agenda today and I want to make sure things keep moving along. I'll just conclude by saying how pleased I am that you are here with us today. You are our partners, and we look forward to a productive day today. Thank you.